The full effect of the coronavirus pandemic on Newcastle Airport has been laid bare in accounts which show a 76% drop in revenues and significant losses.
The accounts for 2020 reveal passenger numbers fell by 80%, with turnover falling from £60.9m a year earlier to £14.5m. That led to an operating loss of £6.2m, coming after a profit of £23.8m in 2019.
In the accounts, the airport highlights how the pandemic ‘heavily affected’ the aviation industry as a whole, with passenger numbers dropping by more than 4m to just over 1m. The drop in passenger numbers led to a reduction in commercial incomes of more than 80%.
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The airport has pointed to a recovery in the sector in recent months as restrictions on travel ease and people return to holidays and business trips overseas. It said that the long term outlook for the airport ‘remains positive’.
In a statement, the airport’s chief financial officer Mark Hunt said: “Over the last 18 months, Covid-19 has had a significant impact on the aviation industry. Last year we saw the majority of aircraft grounded for many months, which resulted in a large reduction in our passenger numbers and revenue into the business.
“Despite a very difficult year, Newcastle International Airport remains a strong asset to the region and a financially robust business.
“During 2021 we have seen international travel slowly resume, with passengers numbers increasing month by month.
“We are very pleased that the Government has announced plans to reduce the testing requirements for those returning to the UK as of October 4 and simplify the traffic light system. We are confident that these streamlined arrangements will ensure that the positive recovery that we have seen so far will continue.”
The airport highlighted the return of Emirates flights to Newcastle four times a week, plus new services to Dusseldorf, a Jet2 aircraft being based at the airport and a new Ryanair base as signs of recovery in its key markets.
The accounts reveal that the airport was given approval by its banks and finance partners to waive covenant testing at three points during the pandemic.
But forecasting suggests the airport could breach covenants in the coming months, raising a ‘material uncertainty’ over its future as a going concern. Airport directors say they have a ‘reasonable expectation’ of securing covenant waivers and that they have sufficient resources to continue.
The airport received £1.8m from the furlough scheme, saying that some of its furloughed staff had volunteered for local and national charities.
But staff numbers fell from 208 to 189, with some redundancy costs resulting.
